Arbitrator erred in voiding Last Chance Agreement

Associated Electric Cooperative sought to set aside an arbitrator’s award reinstating, with back pay, an employee who had violated a last chance agreement. The grievant had been placed on the LCA on April 18, 2011.  On that date he had been selected for a random drug test. Prior to taking the test, grievant informed management that he had smoked marijuana while on leave from the Company approximately 10 days earlier.  Grievant was then presented with an LCA. He declined union representation and was instructed to attend an EAP counseling session.  Grievant was placed on unpaid leave while attending the counseling and was required to submit to additional drug tests at the EAP office. Grievant’s initial drug test was ultimately determined to be negative, but a subsequent test in the EAP  office  was positive for traces of marijuana and a prescription drug (for which grievant did not have a prescription.)

On June 3d grievant was initially told that that he had been cleared to work, but later the same day he was contacted and advised of a positive result for an unprescribed drug.  On June 13, 2011 grievant was called by the plant manager and advised that his employment was terminated for violation of the LCA.

In the resulting grievance, the arbitrator concluded that the LCA, as applied in this case, was unconscionable. The arbitrator noted that at the time he signed the LCA grievant had broken no rule i.e. he had not smoked marijuana on company property, he did not act impaired at work and he had in fact passed the initial drug test.  Finding the LCA unenforceable, the arbitrator turned to the merits of the dispute and found grievant had been denied due process since he had been given no chance to explain before being terminated by phone, and because no investigation had been conducted.

The District Court in Missouri  granted AEC’s request to set aside the award. The court concluded:

While this Court does not sit in judgment of the arbitrator's factual or legal conclusions,... nor does it pass judgment on the validity of the arbitrator's interpretation of the agreement, as noted in Enterprise Wheel at 597, "an arbitrator is confined to interpretation and application of the [LCA]; he does not sit to dispense his own brand of industrial justice . . . . [H]is award is legitimate only so long as it draws its essense from the [LCA]." The record reflects that [Grievant] freely confessed to taking prescription drugs for which he had no prescription, an act proscribed by the LCA. [Grievant] expressly declined union representation. There is no evidence that [Grievant] was pressured or forced to sign the LCA. The employer is entitled to enforce a zero tolerance, drug free workplace, and the arbitrator cited to no authority supporting his conclusion that the employer was not entitled to rely on the terms of the LCA. Where the language of the [LCA] is clear, and unambiguous, and the parties agreed to it, they are bound by it.

The court's decision can be found here.

Update: The Eighth Circuit has reversed the District Court's decision. The Court's opinion is discussed here.